People who die without a will have no say over who inherits their assets, which may leave their survivors – and the courts – to decide who should get what. Those approaching retirement can avoid that problem through careful estate planning.
According to CNN, elements of creating an estate plan
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- Crafting a will, which spells out who will get what.
- Creating a legal document giving someone power of attorney over your estate. The document authorizes that person to make any decisions you may not be able to handle because of memory loss or illness, according to NPR.
- Crafting a living will, which spells out what kind of life-sustaining medical help you want – or don’t want – should you become terminally ill and lack the ability to communicate.
- Identifying a healthcare proxy, who you would authorize to make medical decisions you are physically unable to make.
- Potentially creating a trust, which enables you to set legal conditions regarding how assets are distributed. Creation of a trust can help minimize the estate and gift taxes your survivors will have to pay, CNN reported. A trust may be the best option “If you have a net worth of at least $100,000 and have a substantial amount of assets in real estate, or have very specific instructions on how and when you want your estate to be distributed among your heirs after you die,” CNN said.
Investopedia recommended anyone crafting an estate plan
also take steps that include:
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- Carrying out inventories of their physical and non-physical assets.
- Making a list of their credit cards and debts.
- Choosing someone to serve as administrator of their estate.
- Providing a copy of their will and a listing of assets to the estate administrator.
- Assigning transfer-on-death features to their financial accounts, when possible, to ensure they don’t go through the probate process, through which the court decides how assets are distributed.
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